Icap will reduce headcount and restructure voice brokers’ compensation in the coming year as the interdealer broker sharpens its focus on electronic trading and post-trade initiatives.

Overall revenues at Icap were £1.39 billion in the year ending March 31, 2014, 5% lower than the previous year’s total of £1.47 billion. Profits during the period were 4% lower at £272 million.

Speaking on a conference call this morning, Spencer said: “Given the challenging market conditions, our ongoing focus is on reducing and improving the flexibility of global broking’s cost base. We are reducing the overall headcount and focused on restructuring broker compensation across all regions. The hard realities are that the global broking business, not just Icap’s but also our competitors, is facing a very tough time and a degree of staff slimming is necessary.”

The number of staff to be cut or the nature of compensation restructuring was not disclosed. Icap's rival Tullett Prebon said last week it would cut jobs as part of plans to reduce annual costs by £20 million, with the majority of reductions understood to come from Europe-based front-office staff.

Revenues for Icap’s global broking unit – which includes its voice broking business – fell 8% to £920 million in the year ending March 31. Operating profit for the unit, which employs around 3,000 people, fell by £13 million to £92 million.

Spencer added that Icap’s global broking division now accounts for less than a third of global profits, down from just under 80% in 2006.

A number of regulatory and market factors have led to a decline in voice broking at interdealer brokers. New derivatives rules being implemented globally are pushing swaps trades that were once executed over the phone onto new electronic platforms and through clearing houses. Moreover, investment banks, which use firms like Icap to broker large derivatives trades, are cutting back fixed-income trading.

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A note from analysts at Numis said: "We believe Icap is a key part of the global financial services plumbing system and there will be a time to buy. We do not believe that time is now."

Icap is aiming to combat the slump in voice trading by focusing on electronic markets, post-trade risk and information services, which now account for 69% of operating profits, up from 66% the previous year.

Spencer said: “A long term strategy of ours is to diversify and build these electronic and post-trade services that we did not have virtually at all 10 years ago.”

Icap operates an electronic market for over-the-counter derivatives, known as a swap execution facility, as well as BrokerTec, a market for US treasuries; its EBS market for FX derivatives; iSwap for interest rate swaps; and UK SME exchange ISDX.

While volumes on EBS had shrunk 11% to £133 million during the year, due to weaker euro-dollar spot volumes and low volatility, Spencer said that EBS Direct, a relationship-based trading platform that operates alongside the core platform, averaged $6 billion per day in trades during March. EBS Direct reached a single day record of just over $10 billion on May 13, 2014.

Post-trade risk and information revenues, which include derivatives processing and risk management businesses Traiana and TriOptima, grew 3% to £212 million in the year ending March 31, with profits rising by 7% to £96 million.